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Zscaler (ZS) Stock Sinks As Market Gains: What You Should Know

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In the latest trading session, Zscaler (ZS - Free Report) closed at $42.86, marking a -1.08% move from the previous day. This move lagged the S&P 500's daily gain of 0.41%. At the same time, the Dow added 0.57%, and the tech-heavy Nasdaq gained 0.7%.

Prior to today's trading, shares of the cloud-based information security provider had lost 11.15% over the past month. This has lagged the Computer and Technology sector's gain of 2.38% and the S&P 500's gain of 2.04% in that time.

Wall Street will be looking for positivity from ZS as it approaches its next earnings report date. On that day, ZS is projected to report earnings of $0.01 per share, which would represent no growth from the year-ago period. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $89.34 million, up 41.14% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.14 per share and revenue of $401.72 million, which would represent changes of -36.36% and +32.65%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for ZS. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 7.46% lower. ZS is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note ZS's current valuation metrics, including its Forward P/E ratio of 300.9. This valuation marks a premium compared to its industry's average Forward P/E of 27.64.

We can also see that ZS currently has a PEG ratio of 24.85. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. ZS's industry had an average PEG ratio of 2.24 as of yesterday's close.

The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 148, putting it in the bottom 42% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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